Companies make huge investments in data but it’s predominantly used strictly for operational reporting purposes. Decision-making continues to be driven primarily by experience and less by the data-driven insights. I think this is due a mix of different reasons some of which are listed below:
1. Distance between the decision makers and analytics professionals.
2. Lack of business context and communication skills in the analytics group.
3. Change Management – After all, data is changing the way decisions are made and you are bound to encounter resistance.
I would like to know your view on this.
The MBA Responds…
Thanks for the great question – you’re onto something here!
In many organizations, analytics professionals are challenged with defining their value to business executives. This is due to a number of reasons, but ultimately, the outcome ends up being what Bindal identifies above – the analytics professionals become the hub for handling operational reporting requests. In order to shift from being viewed as an operational reporting utility to a strategic partner/value-driver, the following presents the top five executive concerns that must be addressed by analytics professionals and provides an approach to tackle each one.
- “You’re not telling me about stuff I care about.” Analytics professionals must spend time understanding business executives’ key value metrics. Discussing data or research results that are not aligned with key value metrics is a sure way to lose your most important audience; for example, don’t tell an executive responsible for customer satisfaction about sales forecasts unless the sales forecasts tie back to customer satisfaction. To solve this problem, try creating a simple matrix that connects business executives to key value metrics. To find out what metrics matter, just ask the executives or see if your organization uses scorecards. The goal is to position analytics professionals as strategic partners who care about your most important value metrics.
- “I don’t trust the data.” This one is really common and a valid point. If you don’t trust the data, the only other option is to make decisions based on experience. However, we all know that some data is better than no data at all, but how do you convince the executives? Simple – make them a part of the data collection process. Once you’ve understood the key value metrics, ask the executives which data sources they’d like you to use. If they can’t pinpoint them, suggest some and work with them to get buy-in upfront. Don’t wait till you are done with your analysis! Have multiple checkpoints to gain trust and confidence. Again, the goal is to position analytics professionals as strategic partners who work with the business.
- “I don’t know what action I should take.” I’ve sat in numerous presentations where most make the classic mistake of just presenting data. Data by itself is just information – focus on presenting insights and actions. Traditionally, data analysts leave it to the business folks to interpret the data. But, turn that notion upside down by starting every business conversation with “Here’s what I think the data says, what actions can we take?”‘ Building general business awareness and knowing your organization will help you present actionable insights. But, simply just asking the action focused question will change executives’ perception. The goal is to position the analytics professionals as those who want to drive the key value metrics with action.
- “Change is hard.” Fundamentally, any sort of change is hard – even moving from experience-based decision making to data-driven decision making. But, just knowing that allows analytics professionals devise a deliberate strategy for change management. A data analysts job is to arm executives with actionable insights to make a decision. Therefore, successful analysts consistently ‘shows and doesn’t tell’. Don’t force a decision because the data says so – it’s not your job to make the decision. Just be consistent in how you address the key value metric and deliver the information. And, over time this concern generally goes away.
- “Your data analysis doesn’t compare to my experience.” This ones hard to tackle, but there are subtle and creative ways to tackle it. An executive who delivers consistent results using experience-based decision making is hard to challenge. But, every opportunity you get to discuss a data-driven insight, deliver it in a manner that highlights the gap between an action taken based on experience versus an action based on data. Don’t call out the difference – let it speak for itself. Just lead the horse to water.
As always, thank you for your time and look forward to your feedback.